Interview with the founder of Yulu: We are not just a bike-sharing company
Bike-sharing certainly does not only apply to China. Many Indian companies are now exploring this new business model, with some key similarities and differences between the established Chinese firms such as Ofo and Mobike. Yulu is an Indian bike-sharing startup launched about 3 months ago. I met Amit Gupta, founder of the company at GMIC Beijing. He was among many of the passionate and eloquent Indian entrepreneurs present that day.
Prior to starting Yulu, Amit built India’s first billion-dollar global technology company, InMobi. With a benign smile and a warm handshake, Amit agreed to an interview almost immediately. After expressing our shared love for Darjeeling tea, he also shared with me a lot of his genuine insights on bike-sharing business in India.
Q1: I read from the official website that the initial vision of Yulu was to reduce congestion and improve the environment in India. Are the transportation situations really improved in megacities in India because of the emergence of companies like Yulu?
A: Yulu was started only three months ago. All the companies that are trying to do bike-sharing now in India are less than four months old. So in India, bicycle sharing is a new concept, and the real impact is still to be seen in the long run. But as for Yulu, rather than putting our services in the entire city, we choose a small area. Now we start to see behavior changes, and people previously used to walking or taking shared vehicles for office-home commute have moved to riding bicycles. In India, during the peak hour, it takes fifteen to twenty minutes of waiting time to book a taxi and the taxi driver will charge you the surge fees (50 or 100 percent extra). And many people will actually pay that money. The traffic is so bad that you have to spend 30 to 45 minutes to cover only 3 kilometers. This is the situation in multiple cities in the country.
Typically, people spend 2 to 3 hours on the road to commute everyday. It means you have to go through that madness whenever you have some business to do. It not only hinders national productivity, but also results in economic loss. People won’t be willing to actually meet for business, and we know that new ideas usually come out of face-to-face conversations. From a social point of view, when people go home in a bad mood because of the traffic, they will not be able to behave properly in front of their family and kids.
Infrastructure building boosts business opportunities for Yulu, which in another way also benefits the cities, forming a virtuous circle.
In China, infrastructure comes first. In India, first people began to move into a place and then infrastructure comes. It’s always the opposite. We are lagging behind in terms of infrastructure. In the last 3 to 4 years, prime minister Modi made a lot of push on infrastructure. He created a program called smart city. The government chose twenty cities to start with, making them like Beijing, building proper roads, foot and bicycle paths, water system, solar energy, etc. However you can’t change them overnight, so the government decided to subsidize the cities to fix two to three areas first. Many chosen cities have done a good job, creating a favorable environment for bicycle sharing, which is a huge boost to our business. Now they expand the coverage of the program from 20 cities to 100 cities.
There are five mega cities in India, New Delhi, Bombay, Bangalore, Chennai, Kolkata. Subway now only runs in two of them, and bicycle sharing is actually a great complement for the subway system cause there is usually an awkward distance between our office or home to the subway stations. In the next 2 to 5 years, India is expected to have 15 to 20 cities fully equipped with the metro system, creating more opportunities for bike sharing.
And like China, India is one of the fastest growing economies in the world, with more robust system and people’s stronger belief under the leadership of the new prime minister. This is what makes this business exciting.
Q2: How many cities have Yulu entered?
A: In the last 3 to 4 months, it is showcased that people will ride bicycles despite the fact that there are not enough bicycle tracks. Now we are able to convince two cities Bangalore and Pune to accept our bicycles rather than the traditional docking stations. Our plan is to expand to around 8 cities by the end of this year, and to at least thirty cities in 2019.
Q3: What’s the differences and similarities between India and China in terms of running a bike-sharing business? How’s the performance of Mobike in India?
A: The good part in India is that there is no regulation to start a bike-sharing business. The officers and bureaucrats are usually neutral at first, and what we need to do is to showcase to them the benefits. Rather than financial grants, we ask for policy favors of infrastructure, which they have to make any way.
Another thing is that India has one billion mobile phone connections. Three years ago, there were only 50 million active mobile internet users and the number has gone up to 450 million now thanks to Reliance Jio. In comparison, the number of active mobile internet users in China are 800 millions. However digital payments have not prevailed. Modi’s policies have pushed up the number of digital payment users to 200 million. India also has a large mobile e-commerce website, Patym, of which Alibaba had a majority stake.
And like Ofo and Mobike, we also charge users the security deposit and fees for every thirty minutes. Currently we have a promotion featuring zero security deposit. After May or June, we will charge close to 50 RMB (around 500 rupees) for the deposit and approximately 1 RMB (around 10 rupees) for every thirty minutes.
The biggest difference is that Ofo and Mobike don’t have to worry about the readiness of the cities’ infrastructure.
As for localization, Mobike has been in India for the last six months, but it hasn’t really made any impact as for now. The playbook is different. In India, you have to go and work with the city, real estate developers and policymakers to build this business although there is no legal restrictions of running this business. Even if you have hundreds of millions of dollars, you cannot just dump the bicycles and imagine that everything will work. You can start in a small scale, with two or three thousand. In India, we don’t have the crazy dumping of bicycles like what happens in China. If you put too many bicycles in public places, someone will raise objections.
Q4: Users can take Yulu’s bikes home after 6 p.m. Where does the idea come from？
A: If you just leave it on the street, someone will definitely take it away or break it. So we decided that we cannot leave the bicycles unattended at night, especially in those not so good areas where people might do something with it. Let’s say, if we hire people to pick up those bicycles one by one, it will be a massive workload (like what Ofo and Mobike do), so we created the functionality on Yulu’s app that commuters can keep the bicycles during the night for free, even put up their own locks and use it in the morning, which brings great convenience. Billing starts once the bike has been unlocked and the billing ends when the bicycle is locked, however the system still connects the keeper with the bicycle, making him accountable the whole time.
Q5: What if a user intentionally damage the bicycle?
A: There will be, of course, penalties. Another invention is to put a tracking device in the bicycle separate from the lock, so that ill-intentioned people will find it difficult to take it away or damage it. It’s like a black box in the airplane. The next batch of bicycles coming in July will have that feature.
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Q6: Are there any specific implications about the color of Yulu bikes?
A: First, we want to avoid yellow or orange which is already the color of Ofo and Mobike. Secondly, green is already the color for Zoomcar and Ola Pedal (bike-sharing companies already started in India). Then I began to think that what binds India together is not religion, culture or language, it is actually interestingly the game of cricket. The sport itself is like a religion to the country. From top to bottom, from north to south, everyone is passionate about it. And blue happens to the color of our national cricket team. Apart from this, the color blue is usually seen in high-end premium looking bicycles, which differentiates our bikes from common personal bikes.
Q7: What do you think are the advantages of Yulu compared with the competitor Ola Pedal?
A: Ola Pedal also does Didi kind of business and food delivery. However we are not a bike-sharing company. I believe we are the only company in India focusing on solving urban mobility problems, aiming to create cost-efficient and environmentally friendly solutions for people to commute from A to B. It doesn’t have to be bicycles, only that bicycles are the most sustainable mobile tools for mankind, that we use for the settings.
I also think of Elon Musk, who I consider to be my biggest guru (a spiritual leader or teacher in Hinduism). He himself creates Tesla to fight mobility problems. So he is one of the first people making impact on sustainability.
Apart from this, I have known my co-founders for 15 to 25 years, and all four of us have made enough money so that we don’t work solely for money now. We are doing it for the potential social impact.
Q8: As far as we know, InMobi is the first company you started. Compared with some 10 years ago, what are the changes of entrepreneurship environment in India?
A: As for the environment of entrepreneurship in India, things have changed. When we started InMobi ten years ago, there were no angel investors, no cloud service and no co-working space. You have to go find an office, and make it look cool. Now the environment is much more favorable for new ideas and entrepreneurs. Successful startups like Flipkart, InMobi and Ola have inspired people to join the ecosystem. Now India has jumped 50 ranks in the ease of doing business ranking. (It now ranks 100 according to the ease of doing business ranking according to World Bank’s report)
Q9: What are the possible partnerships that you are seeking in China?
A: I’m exploring technology partnerships, as some of our vehicles, for instance, e-scooters, will be manufactured in China. I’m also looking for business partners that can bring innovation practices and experiences to India, and we are happy to share our business model with Chinese counterparts as well. The third point is about money. Lot of VCs should consider investing in Yulu, and taking advice from these business insiders is also of instructive significance for me, which I wouldn’t expect to learn from Ofo and Mobike directly.